Robinhood, the fast-growing trading app that allows unlimited commission-free trades in stocks, ETFs, and options, as well as buy and sell cryptocurrencies, has announced it is canceling its UK Launch amid Covid-19 pandemic.
In a note to traders and the press, the executive team has explained the decision was based on the unpredictability of the year 2020 as the COVID-19 pandemic took everyone by surprise and forced a partial shutdown of the global economy.
“We’re saddened to share that we’ve made the difficult decision to postpone our UK launch indefinitely. We’ll be closing our waitlist and taking down our UK website shortly”, said the announcement. “The world has changed a lot over the past several months and we’re adapting with it. On a company level, we’ve come to recognize that our efforts are currently best spent on strengthening our core business in the US and making further investments in our foundational systems.”
“Since we announced our intent to launch in the UK, we’ve been fueled by your excitement for Robinhood and humbled by your response. We’re sorry that we cannot deliver the product we promised you this year”, it continued. “Although our global expansion plans are on hold for now, we will continue our work to democratize finance for all and we look forward to the day when we can bring this mission to the UK.”
In late 2019, Robinhood was fined $1.25 million for best execution violations related to its customers’ equity orders and related supervisory failures that spanned from October 2016 to November 2017. FINRA found that for more than a year, Robinhood routed its customers’ non directed equity orders to four broker-dealers, all of which paid Robinhood for that order flow. This arrangement is known in the brokerage industry as payment for order flow. As part of the settlement, Robinhood also agreed to retain an independent consultant to conduct a comprehensive review of the firm’s systems and procedures related to best execution.
Earlier in 2019, Robinhood was granted the famous BitLicense from the New York State, which allows them to offer cryptocurrency trading services with the approval from the NY government.
Robinhood’s crypto app offers its trading services without any added transaction fees since early 2018. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).